KARACHI: K-Electric announced on Saturday the launch of Pakistan’s first-ever listed retail short-term Islamic debt instrument, the KE Retail Sukuk.

The initial public offering (IPO) will open on Aug 4, offering individuals across Pakistan, including KE’s residential and commercial consumers, the opportunity to invest in this landmark financial product.

During the current blackout phase, only individual investors can participate. However, from Aug 18 onwards, the IPO will be open to all types of investors, including asset management companies. The pre-IPO phase, amounting to Rs1 billion, was specifically tailored for KE’s industrial and large commercial consumers, as well as high-net-worth individuals. This phase has already been completed, according to KE’s announcement.

Earlier this year, the government of Pakistan successfully launched its first three-year Ijarah Green Sukuk, which attracted Rs161.7bn. However, the government raised Rs31.99bn at a net rental rate of 10.64 per cent, under its Sustainable Investment Sukuk Framework aligned with Vision 2028.

The Green Sukuk offer was oversubscribed five times, opening the door for both government and corporate entities to raise funds through Islamic bonds. Additionally, the government has decided to allow individual investors to participate in these sovereign bonds.

KE highlighted that the launch of its retail Sukuk marks a significant milestone in Pakistan’s corporate sukuk market. The initiative aligns with the Securities and Exchange Commission of Pakistan (SECP) and Pakistan Stock Exchange (PSX) vision of promoting secondary capital markets. The structure and compliance of the KE Retail Sukuk have been meticulously reviewed and approved by three independent Shariah boards, including those from HBL, ASAS Shariah Advisory Services, and Mufti Ali Asghar. These boards have ensured that the sukuk adheres to Shariah guidelines, reinforcing KE’s commitment to ethical and interest-free financial solutions.

Despite the growing sukuk market, Pakistan’s corporate sukuk landscape remains largely dominated by privately placed instruments. Corporate sukuk issuances total only Rs153bn, representing just 9% of the overall market, while sovereign sukuk issuances amount to Rs1.7tr, or 91% of the market share. The introduction of the KE Retail Sukuk aims to broaden participation in the debt capital markets, providing a new avenue for individual investors.

The KE Retail Sukuk is designed to offer an attractive investment opportunity with potential high returns and tax advantages. A unique feature of this sukuk is the option for bill adjustments against monthly profits for KE’s residential and commercial consumers. Muhammad Aamir Ghaziani, CFO of K-Electric, explained that the sukuk operates under a Shirkat-ul-Aqd Islamic structure, allowing investors to directly participate in KE’s core business operations related to electricity provision.

Published in Dawn, August 3rd, 2025